Vietnam’s central bank unexpectedly raised interest rates by another 1 percentage point for a second straight month to help ease pressure on a currency that has slumped to a record low.
The refinance rate will rise to 6% while the discount rate will increase to 4.5%, starting Oct 25, the State Bank of Vietnam said in a statement late Monday. The central bank also raised the cap on the dong deposit rate for the one-to-less than six month tenure to 6% and increased the interbank overnight lending rate to 7%.
The move was done “to help restrain inflation, stabilise the dong and maintain stable macro economy, and ensure the banking system’s operational safety,” according to the SBV statement. The central bank also pledged “to intervene in the foreign currency market” to meet the dollar requirements of banks and keep the money market stable.
